M/s. M.p. Kerosene Agency and Ors. Vs Indian Oil Corporation Ltd. and Ors.

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1

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Digitally signed by SMT NIRMALA RAO

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2025:CGHC:5366

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 2298 of 2014

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1 - M/s. M.P. Kerosene Agency A partnership firm duly registered under the provisions of the Partnership Act 1932, having Its Registered Office At Jawahar Nagar, Raipur, Distt Raipur, Through Its Partners, Chhattisgarh

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2 - Manmohan Agrawal S/o Lt Shri Mahaveer Prasad Agrawal, Aged About 48 Years Partner In M/s, M.P.Kerosene Agency, R/o Jawahar Nagar, Dist Raipur, Cg, District : Raipur, Chhattisgarh

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3 - Brijmohan Agrawal S/o Lt Shri Mahaveer Prasad Agrawal, Aged About 50 Years Partner In M/s M.P.Kerosene Agency, R/o Jawahar Nagar, Distt Raipur, Cg, District : Raipur, Chhattisgarh

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... Petitioners

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versus

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1 - Indian Oil Corporation Ltd. Through Its Chairman, Having Its Registered Office At Indian Oil Bhawan, G-9, Ali Yavar Jung Marg, Bandra E, Mumbai Maharastra 400051, Chhattisgarh

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2 - Senior Divisional Retail Sales Manger Indian Oil Corporation Ltd, Raipur Divisional Office, Indian Oil Bhawan, Rajiv Gandhi Marg V.I.P. Road, Po Ravigram, Telibandha, Raipur, Dist Raipur, Cg, District : Raipur, Chhattisgarh

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3 - Shri Jaiprakash Agrawal S/o Lt Shri Mahaveer Prasad Agrawal, Aged About 57 Years R/o Jawahar Nagar, Tah And Distt Raipur, Cg, District : Raipur, Chhattisgarh

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	---- Respondents
For Petitioners	: Shri Amrito Das, Advocate.
For Respondents No.1 & 2	: Shri N. Naha Roy, Advocate.
For Respondent No.3	: Shri A.A. Laxmidhar, Advocate holding the brief of Shri Ali Asgar, Advocate.

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Hon'ble Shri Justice Rakesh Mohan Pandey

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Order on Board

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29.01.2025

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The petitioners have challenged the order dated 17.11.2024 issued by respondent No.1 whereby a decision was taken to stop the supply of kerosene to the petitioners’ firm. The petitioners have further sought a direction to respondent No.2 to consider the proposal for the restructuring of the partnership firm in accordance with the proposal submitted by the petitioners.

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The facts of the present case are that the father of the petitioners and respondent No. 3 (late Shri Mahabir Prasad Agrawal) was awarded the dealership for the sale of kerosene by respondent No.1 vide order dated 1.1.1980. After the death of their father, there were three members in the partnership firm i.e. the petitioners and respondent No.3. Respondent No.3 tendered his resignation on 3.2.2014 in accordance with the provisions of the Partnership Act. Subsequently, the petitioners submitted a proposal for the reconstruction of the partnership firm before the Registrar of Firms and Societies as well as respondent No.1 on 30.9.2014. Respondent No. 3 raised an objection stating that no such resignation had been tendered by him. A report was lodged at the police station and an enquiry was conducted. During the inquiry, the document in question was sent to a handwriting expert, who opined that the document contained the signature of respondent No. 3 and as a result, the complaint was closed. Due to the dispute regarding the structure of the partnership firm, respondent No.1, vide Annexure-P/1 dated 17.11.2014, stopped the supply of kerosene to the petitioners.

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3

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Learned counsel for the petitioners would submit that respondent No.1 is not involved in the family dispute, as the dealership was granted to the firm. He would submit that, at present, there are two partners in the partnership. The resignation was tendered by respondent No. 3 and an application for restructuring of the firm was submitted to the Registrar of Firms and Societies. He would contend that respondent No.1 was duly informed and that the respondent authority had no right to pass the order (Annexure-P/1) stopping the supply of kerosene. He would further argue that respondent No.1 committed an error of law by rejecting the proposal for the restructuring of the firm vide Annexure-P/1A dated 24.12.2014. He would contend that there is a family dispute and respondent No. 1 wrongly interfered with the matter.

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On the other hand, learned counsel for the respondents would oppose the submissions made by counsel for the petitioners. Shri N. Naha Roy, counsel appearing for respondents No.1 & 2 would submit that there is a dispute between the petitioners and respondent No.3, and therefore, the decision was taken to stop the supply of kerosene. He would further submit that after the resolution of the dispute between the family members, an appropriate decision would be taken by respondent No.1. He would further contend that respondent No.1 has taken a decision in accordance with the dealership agreement. He would also contend that the petitioners’ mother passed away on 13.2.2011 and the Corporation was only informed after one year, which led to the decision being taken.

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Learned counsel for respondent No. 3 would submit that respondent No. 3 never tendered resignation from the partnership firm. He would further submit that the supply of kerosene was stopped due to a request letter made by the petitioners themselves. He would support the contention made by counsel for respondents No.1 & 2.

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I have heard learned counsel for the parties and perused the documents present on the record.

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Clauses 13 & 15 of the agreement read as under:-

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“13. The Dealer shall not sell, assign, mortgage or part with or otherwise transfer his interest in the dealership or the right, interest or benefit conferred on him by this agreement to any person. In the event of the Dealer being a partnership firm any change in the constitution of the firm, whether by retirement, introduction of new partners or otherwise howsoever will not be permitted without the previous written approval of the Corporation notwithstanding that the Corporation may have dealings with such reconstituted firm or impliedly waived or condoned the breach or default mentioned hereinabove by the Dealer. In the event of the death of any of the partners, the Dealer shall immediately inform the Corporation giving the necessary particulars of the heirs and legal representatives of the deceased partner and it shall be the option of the Corporation either to continue the dealership with the said firm or to have a fresh agreement of dealership with any reconstituted firm or to terminate the dealership agreement and the decision of the Corporation in that behalf shall be final and binding on all the parties concerned. No claim on premature termination for compensation or otherwise will be made or sustainable against the Corporation on account of such

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5

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termination.

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15. The Dealer undertakes that he and his servants and agents will observe and perform the provisions of the Petroleum Act 1934 or any statutory re-enactment or modification thereof for the time being in force and all rules and regulations made thereunder and all other Government or Municipal Local or such like acts, laws, regulations and bye-laws, as may be in force from time to time. If there is any violation on the part of the Dealer of the aforesaid provisions or statutory rules and regulations, the Corporation will have absolute right to discontinue the supplies and take any other action including the termination of this agreement as the Corporation may at its absolute discretion think fit.”

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It is undisputed that there were three partners in the partnership firm. The dealership was awarded to the petitioners’ firm vide an agreement dated 9.4.1991. The dispute arose when respondent No. 3 tendered his resignation. Respondent No. 3 denies the fact that no such resignation was tendered by him. A complaint was lodged at the police station and the police inquired into the matter. The document along with the specimen signatures of respondent No. 3 was sent for examination to a handwriting expert. According to the opinion of the handwriting expert, the signature of respondent No. 3 on the alleged document matches with the specimen signature; therefore, the stand taken by respondent No. 3 appears to be incorrect. The resignation was tendered by respondent No. 3 and thereafter, a proposal was sent by the petitioners to both respondent No.1 and the Registrar of Firms and Societies. Respondent No. 3 failed to challenge the opinion given by the handwriting expert and thus, it attained finality.

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The proposal for the restructuring of the firm was sent to respondent No. 1, but the same was not accepted and the decision was made to stop the supply. The proposal was rejected on the grounds that the retiring partner had not given his consent. Since respondent No. 3 has tendered his resignation, there was no requirement for the consent of respondent No.3/retiring partner. Therefore, respondent No. 1 committed an error of law by rejecting the proposal sent by the petitioners’ firm. The decision taken by respondent No.1 vide Annexure-P/1 is hereby quashed.

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The supply of kerosene was stopped by respondent No.1 solely because of the dispute between the parties. Since the resignation was tendered by respondent No. 3 and a proposal for restructuring was submitted to the Registrar of Firms and Societies, the decision taken by respondent No.1 appears to be erroneous, and the order in Annexure-P/1 is therefore quashed. The Registrar of Firms and Societies is directed to take a decision on the proposals sent by the petitioners’ firm for restructuring the firm, preferably, within a period of 90 days from the date of receipt of a copy of this order.

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With the aforesaid observation(s), the petition is allowed .

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Sd/- (Rakesh Mohan Pandey) Judge

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Nimmi

M/s. M.p. Kerosene Agency and Ors. v. Indian Oil Corporation Ltd. and Ors.

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M/s. M.p. Kerosene Agency and Ors. v. Indian Oil Corporation Ltd. and Ors.

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